Highlights - Marbella Luxury Real Estate Magazine 2019

Highlights
New build vs Resales 2012-2018 by municipality
*Provisional, unconfirmed figures for the fourth quarter 2018
Source: Ministerio de Fomento
Over-supply?
With a slight time-lag, this translates into a
record number of new projects entering the
market, and while they are mostly smaller in
scale than during the boom of the 2000s,
there is a worrying lack of variety, as many
seem to focus on the same mix of design,
amenities and price range. Feedback from
the market is that the greatest drop in sales
has been seen in the lower-to-mid range,
which appears to be suffering from a degree
of oversupply and over-competition. The
more idiosyncratic offering of the top-end
of the market looks to be more robust, and
those brave enough to veer away from the
lowest common denominator are finding
rewarding niche segments in the market,
though in Marbella, where there is in fact
a shortage of new projects, the scenario is
quite different.
Price and cost
It therefore appears that, external factors
aside, there is a strong appetite for the
lifestyle and properties of this region, but that
oversupply and high prices are beginning to
have an adverse impact on the market.
Earlier projects saw developers buy the best
plots of land cheap, build at a lower cost and
sell faster, yet now land values have risen
faster than the properties built on them,
construction costs are similarly putting
pressure on investors’ margins, and the rising
house and square metre prices are beginning
to put buyers off – especially in a market with
so much choice and the best locations taken.
Value
High prices are not sexy unless you’re in a
rapidly upwardly mobile economy, and while
top-end buyers are willing to pay a premium
for well-located modern villas and apartments
that offer true villa specifications, the recent
rise in popularity of cheaper areas such as
Manilva indicates that the lower half of the
market is coming full-circle and searching
for value in the form of repurposed, previously
unsold stock of the kind being snapped up
in and around Marbella between 2010 and
2014. The surrounding areas have recovered
more slowly than Marbella, but they are also
drawing buyers through attractive prices
in a Costa del Sol market that seems to be
losing the battle against value, as the average
price increase in 2018 ranged from 3% to
7% depending on location and property type
within the Marbella area.
Off-plan versus Re-sale
If it was modern off-plan developments that
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